How Losers Think - Technical Analysis Course Part II

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Let's continue our discussion of how losers think in our technical analysis course series.

Going long in the market is something his mind has a fondness for . If prices fall, he figures that's the right time to buy. The budding trader is a price level trader rather than a price movement trader . Terms of value is the way he thinks, not about value movements. He buys on days of declines .

Everyday logic does not work in the market . Losers believe in the correctness of their natural reactions. In most cases, the opposite is going to be true. Our natural reaction to news is invariably wrong . Negative news output in society mentally attracts a loser . He knee-jerks in times of ebullient excitement . He will slip into the market with the news rather than against it . He can't keep from becoming fascinated with publicized bullish and bearish events . His mind just does not "cotton" to dull markets . On up days, he busy, buying only on emotion. When a topping formation occurs, his herd instinct makes him purchase on the first reaction , simply because it's "cheaper" - just due to his mind saying that the price is cheap.

His mind is so caught up with enjoying misery and struggling to exist , that its own inertia traps and chains it . This person has never learned how to think using a technical analysis course.

The losers mind does not think . It doesn't think, although it's supposed to. It's entrapped by emotion . The mind's processes become overwhelmed by unawareness, fear, insecurity, and greed. According to sociologists . 13% of the leftover 15% think that they think, but only 2% really think. Can you believe it? Those that really think only amounts to 2% of the world's population! And, it's got nothing to do with being stupid, or bright . Even stupid people can think - it's just that they don't ! An interesting thing to note that the 2% thinkers actually approximate the percentage of commodity traders who are consistently successful year after year . The 2% who think , know the market their trading, know the price movements, know the fundamental factors underpinning the trend, and the market's reaction to it , and are well-disciplined, almost bored, without fear/ and know the game in the spirit of fair, good and bad bets . The percentage that only think they think, get involved with technical chart formations. They become "pros" - especially when they have a recent but short lived success and they feel they have the holy grail that will keep them being successful . At the back of his mind is fear, - insecurity , - all those patterns of behavior that are not product that they have learned since their youth. They're still there, lurking, and he knows it . And then there is a leap of the market that grabs him, and shakes him, once again to his very roots .

Without thinking , Mr. 13% ends up back with the other 85% that don't think. He has the idea that there is some conspiracy against him, by everyone, from the market to the floor traders. He feels this experience, rather than thinking about it . Fear, fear of the future, uncertainties, worries, insecurities , get rid of rational thinking and he without thinking exposes himself, - to risks, getting back in the market, and biting the bullet , since an aggressive stance is what he feels, (Mr. Macho) that struggling will bring profit , which will allow him to start over again.

(This is the man who just hates going home to his wife with bad news . During this event emotions grip him , just as occurred in the market place.)

It is sad, very sad . But the ratio of non thinkers to thinkers is not going to change .

In other discussions we have in the technical analysis course series we'll look at the winner's way of thinking .

Charles Drummond is a Canadian trader who has written nine books about trading and has created a technical analysis course called “Drummond Geometry." His biography and further information about his work can be found at the www.drummondgeometry.com website.

Article Source: http://depositarticles.com/

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